Start-up: How Team Structures vary from Bootstrapping to Corporatization:

This blog post is dedicated to all the budding entrepreneurs who are looking to start off their own ventures and are building their own seed teams. This blog post is a result of the session which Sachin Malhan took during our ISB iDiya boot camp in December and also from the recent HR panel discussion that happened during the Sankalp Forum. Sachin’s talk especially was inspiring and thought provoking, I will try and cover all the important points that he mentioned during the course of this blog post where I primarily would be talking about how we at SourcePilani have structured our Management team during the various stages of the company.

This post will be covered in two parts:

Bootstrapping:

As every startup do even we have started off with a core team multi tasking :This stage of any startup is called Boot Strapping and this is when you“squeeze costs, squeeze resources”

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During this stage of boot strapping according to me we should let the core team multi task at the same time try the best squeeze in resources and costs to make the company sustainable. This is when you will figure out what ? how ? and when? . This is very important stage of the company and if you are starting a company with a set of friends then make sure that there is proper accountability/reporting at every step, (someone should be liable for a unfinished task). We lacked this at the beginning, we thought someone would feel bad if we confront him, but always remember when you are working for a start up the company’s priorities should be your first priority more than the personal relationship that you share with your team mates. This might sound very easy but when you actually start confronting your team mates you might end up in an awkward situations but eventually this will help you get to know more about your teammates vision and their goals for the company.

During this stage you will get to know the strengths and weaknesses of your peers and it will help you segregate focused roles in the future.

We perhaps planned to structure our company a way too early; we tried to get in too many people on the board without having a proper strategy about what they are going to do and without a proper business plan in mind. Having a business plan would definitely help and it will also help to push the team members to work towards achieving the targets. Our initial Management team of 4 failed because we had different visions and we were spending too much without making the company sustainable, too many months of negative cash flow did no good for the team and we had to let go some of them. Last April, we had to down size our team and restart from scratch and hence we had to continue boot strapping till the end of last year as we took time to break even operationally. We also lacked proper accountability for unfinished tasks. Hence based on my little experience here are a few take aways:

Take away to all budding entrepreneurs :

Build your team with likeminded people & make sure you have accountability set right from day one.

Don’t recruit anyone who comes into the organization to increase his own salary. ( This applies only to the core team, people in the core team will have to sacrifice part of their salaries otherwise the overheads would be too high if all of them work at market values)

Don’t try to get the structure in too early in the company.

Bootstrap – “Do some Jugad initially” Keep the costs as low as possible and at the same time make sure that you get some cash flowing in.

Learn to say “No”. In this stage as you are desperate for projects you end up taking up projects which are not part of your core competency. (You will really get tempted, hence make sure you don’t )

Mood swings and other frustrations: This is where likeminded team mates will help. Your team mates should be your close buddies as well with whom you can share your frustrations over a cup of coffee. (both personal/ professional)

Having said all that, this is the stage you enjoy the most. Job satisfaction is at its best and every small achievement becomes big and it keeps you motivated.

In Part 2, I will be talking about what we have done post bootstrapping stage and also will be speaking about the importance of processes to achieve scale.

Would like to hear your thoughts:

Please let me know what you think about this post. Add comments if you want to share your thoughts and experiences.

7 Responses to “Start-up: How Team Structures vary from Bootstrapping to Corporatization: ”

Pavan Atukuri

May 6, 2010 at 9:32 am

It’s a good read. Takeaways are well articulated. Waiting for part-2

joe

May 6, 2010 at 12:16 pm

Yo B!

Loved the post :). Can you elaborate the 6th point? ( “team mates should be your close buddies ” ). Do you suggest to start a company with close buddies or whoever it is, develop such a relation with that person?

Jo E!
Either way it is cool. There are pros and cons for starting a company with close friends. (More Pros than cons though). I just meant that both the partners should be really close (no place for secrets and personal aspirations).

Rajeev

September 19, 2010 at 6:39 am

Every line of the blog is informative. Actually it helped to shape some of my ideas. One question: If you are looking to open a startup and currently working, then what is the right time to leave your job ? I know this decision would vary person to person but is there are any parameters which one needs to keep in mind.

@Rajeev : IMHO – thr is no way you can work in a startup part time. Build your idea while you are still working, do your research, look for investors etc. Once you are confident put your papers and start your journey.